The company’s profit growth in this financial year has been hurt, more so because of its investments in startups.NEW DELHI: The promoters of Micromax Informatics have taken full operational control of the company after the departure of some top executives and are focused on taking India’s No. 2 smartphone maker to the top position by dethroning Samsung Electronics in the world’s fastestgrowing market. Micromax cofounder Rahul Sharma, speaking to ET, described 2015 as an “eventful” year.

That’s when the chairman and the heads of finance, sales and R&D quit, followed by the CEO in early 2016. It was also the year when intense competition, spurred by new entrants from China, hit the company’s shipments, which were down 12.1% year on year and 23.5% quarter on quarter in the October-December 2015 period, according to International Data Corporation. The company’s profit growth in this financial year has been hurt, more so because of its investments in startups.

Talks for potential funding from Alibaba also fizzled out. Sharma said all that’s in the past now and the outlook is strong for the company that he founded with Vikas Jain, Rajesh Agarwal and Sumeet Kumar. “Whatever has had to happen in 2015 has happened. Everybody from China came in. People came in, people went out, yet we are still in the top two,” Sharma said, adding the company isn’t talking to anyone for investments as it generates enough cash.

He downplayed the effects of the top-level exits, saying the promoters had run the company earlier as well — be it product or marketing — and would do so again with the help of business heads. Referring to the acrimonious exit of former chairman Sanjay Kapoor, Sharma said, “Great guy, but somehow it didn’t work out. He came with a team, they all went out together. No big deal.”

Micromax and Kapoor are currently resolving a dispute over his stock options. Sharma quashed speculation that some of Micromax’s foreign investors were looking to exit. Its overseas investors include TA Associates, Sequoia Capital, Sandstone Capital and Madison India Capital. “They have seen tremendous growth. And, as of now, they want to stay because in India, the smartphone market is growing.”

He said that despite the negativity around Micromax, “we are still running the complete race. As an organisation, we will still be profitable (year through March 31)” and close the year with $2 billion (Rs 13,600 crore) revenue, up over 30%. He expects revenue to climb about 40% in the financial year starting April 1, backed by some 50 phone launches and Rs 300 crore in marketing spending.

Micromax, which posted a profit of Rs 363.8 crore in FY15, expects to sell up to 56 million mobile phones in the country by March 2017, up 56% from the 36 million handsets it expects to sell in the current financial year. “We’re not only looking at (being) the largest brand in India…Our objective is to get to being the fifth-largest from the 10th largest worldwide,” Sharma said.

Micromax and other Indian handset companies are facing an onslaught from Chinese smartphone makers, including Lenovo-Motorola and Xiaomi, that face saturation in their home market. More rivals are expected to come this year. Sharma said the churn would be more in the No. 3 to No. 10 positions. “For us, Samsung is the competition,” he said.

The South Korean electronics giant had a 25.7% share of the smartphone market in 2015, compared with Micromax’s 16.1%, as per Counterpoint Technology Market Research. The gap was wider in the October-December 2015 quarter, at 28.6% and 14.3%, respectively.

In FY17, Micromax aims to thwart Chinese rivals and catch up with Samsung by targeting the mid-segment — devices costing Rs 10,000 to Rs 15,000 — and expand its share from 11%. It already leads the entry-level — Rs 3,500 to Rs 10,000 — segment with a 30% share. The two categories together typically see the highest volumes of sales in India.

In the longer term, Micromax is looking at sustainable growth, with smartphone sales already plateauing globally and growth expected to slow in India in about two years. To tackle that, the company will continue to invest in startups and integrate their services into devices of Micromax and its subsidiary Yu Televentures to help improve margins and create new revenue streams.

Micromax is investing millions in startups whose services such as shopping, taxi, movie booking were aggregated and integrated into the Yutopia model, the first such from Yu Televentures, removing the need to download apps. The integration, along with mobile wallet, will be available on all devices the company offers.

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